Musings on taking technology to Bharat

India is home to largest underbanked population in the world - 25% of the total underbanked people on the planet are in India. It's a statement enough that existing financial tools in the market aren't designed for those in the lower income group despite all the push by the system in last few decades. Existing financial institutions have always focused on serving those who can give the banks enough liquidity in maintaining an average monthly balance, credit score comes after it.

With the increasing penetration of the internet, mobile is almost about to become the first universal device. Thanks to the telecom industry that has shown the world to deliver services at high volume and low cost, overcoming the geographical constraints on the way. Why can't banking services do the same? It's time that we put the power in the hands of individuals instead of the system. Hence, we decided to build a mobile-first financial tool to empower them.

The predominant USSD interface is clumsy, text heavy, hierarchical, and a barrier to uptake. Smartphones open a whole new range of interface options that can leverage touch-screens, images, graphics, and sound. A well- designed interface can affect millions of customers in their day-to-day interactions with finance. Many market signs point to rising smartphone usage in the next 5-10 years. Smartphone interfaces could be a key to unlock value for low-literate consumers overcoming communication barriers imposed by early-stage feature phone-based models.

While working with the informal lenders in the low-income geographies where micro-entrepreneurs operate, we identified key principles of design that drives their engagement when it comes to accessing a financial tool

Reliability: Reliability is not common in the lives of poor: most services they deal with are unreliable, and it begins from their childhood - from school and clinic to water and electricity supply. Their own income is unreliable, always small but often irregular and unpredictable as well. One of the biggest challenge of living on less than Rs.120 a day is that it seldom comes on time. The next best thing to have reliable income is to have reliable financial partners. Delivery of product and services

at promised time,

in promised amount, and

the promised interest

Convenience: By convenience we mean the chance to take and repay loans, frequently, close to home + work, quickly, privately and unobtrusively. As the level of convenience increases, the volume of intermediation possible for a house-hold multiplies. MFIs have shown that establishing a convenient local venue for interactions with customers usually leads to excellent loan performance. Today, nothing is more convenient than accessing a service over mobile phone.

Flexibility: It refers to ease with which transactions can be reconciled with cash flows. For money management, flexibility in value and frequency of transactions is needed so that the customers can transact in any sum, no matter how small, at any time. Flexible adaptation to cash flow of customers can take many forms.

Customers can opt for loan terms to chose from so that they can prepay during the high season

Refresh loans when liquidity becomes constrained part way through a payment regime

Repayment schedules can be made flexible without abandoning discipline by allowing grace periods or

By rewarding on-time payment with increase in credit limit

Structure: Regularities - such as scheduled visits by team mates, or planned repayment schedules - that promote self discipline are what we mean by structure. Structure becomes important as values rise and term lengths grow, above all in long-term or high value loans. It is helpful especially where harshness is softened by appropriate kinds of flexibility. Structure reinforces reliability.

​It is not meant to be comprehensive, but is intended as a starting set of principles that will improve smartphone interfaces for basic mobile financial tools in low-income geographies.